Question

View History Bookmarks Window Help 88 TL player-ul meducation.com Connect-Class Managerial Accounting MHE Reader a NA EXERCISE 10-1 Direct Materials Variances LO10-10 Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company's products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 35,000 helmets, using 22,500 kilograms of plastic. The plastic cost the company $171,000. According to the standard cost card, each helmet should require 0.6 kilograms of plastic, at a cost of $8 per kilogram. Required: 1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 35.000 helmets? 2. What is the standard materials cost allowed (SQ X SP) to make 35.000 helmets? 3. What is the materials spending variance? 4. What is the materials price variance and the materials quantity variance? 8884 WE

Answer 1

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Bandar Company	A	B	C=A*B
Answer 1	Helmets made	Input per unit	Quantity required
Standard Quantity for 35,000 Helmets	35,000.00	0.60	21,000.00	Pounds
Answer 2					Note
Standard Quantity for 35,000 Helmets			21,000.00	Pounds	See C
Standard rate per pound			8.00		D
Standard Material costs allowed for 35,000 Helmets			$   168,000.00		E=C*D
Answer 3
Actual Quantity used for 35,000 Helmets			22,500.00		F
Standard rate per pound			8.00		See D
Standard Material costs for actual quantity used			$   180,000.00		G=F*D
Actual cost of materials			171,000.00		H
Materials Spending Variance (C-B)			$       9,000.00	Favorable	I=G-H
Answer 4
Material price variance is same as Materials Spending Variance i.e.			$       9,000.00	Favorable	See I
Material Quantity Variance
Standard Material costs allowed for 35,000 Helmets			$   168,000.00		See E
Standard Material costs for actual quantity used			$   180,000.00		See G
Material Quantity Variance			$     12,000.00	Unfavorable	J=G-E